Correlation Between Crown Holdings and ZOOZ Power

Can any of the company-specific risk be diversified away by investing in both Crown Holdings and ZOOZ Power at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Crown Holdings and ZOOZ Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crown Holdings and ZOOZ Power Ltd, you can compare the effects of market volatilities on Crown Holdings and ZOOZ Power and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Crown Holdings with a short position of ZOOZ Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Holdings and ZOOZ Power.

Diversification Opportunities for Crown Holdings and ZOOZ Power

-0.76

Correlation Coefficient

Crown Holdings  ZOOZ Power

Pay attention - limited upside

The 3 months correlation between Crown and ZOOZ is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Crown Holdings and ZOOZ Power Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZOOZ Power and Crown Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Crown Holdings are associated (or correlated) with ZOOZ Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZOOZ Power has no effect on the direction of Crown Holdings i.e., Crown Holdings and ZOOZ Power go up and down completely randomly.

Pair Corralation between Crown Holdings and ZOOZ Power

Considering the 90-day investment horizon Crown Holdings is expected to under-perform the ZOOZ Power. But the stock apears to be less risky and, when comparing its historical volatility, Crown Holdings is 15.95 times less risky than ZOOZ Power. The stock trades about -0.43 of its potential returns per unit of risk. The ZOOZ Power Ltd is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  5.00  in ZOOZ Power Ltd on September 27, 2024 and sell it today you would earn a total of  3.86  from holding ZOOZ Power Ltd or generate 77.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Crown Holdings  vs.  ZOOZ Power Ltd

Crown Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

ZOOZ Power

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZOOZ Power Ltd are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, ZOOZ Power showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crown Holdings and ZOOZ Power

The main advantage of trading using opposite Crown Holdings and ZOOZ Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Holdings position performs unexpectedly, ZOOZ Power can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ZOOZ Power will offset losses from the drop in ZOOZ Power's long position.

The idea behind Crown Holdings and ZOOZ Power Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.